California's April jobless rate higher than Great Recession

May 22, 2020 2:03 PM
By: Canadian Press

SACRAMENTO, Calif. — California's unemployment rate nearly tripled to 15.5% in April as the nation's most populous state lost more jobs in one month from the coronavirus than it did during the Great Recession a decade ago, state data released Friday showed.

Just two months ago, California was boasting an unprecedented economic expansion as it added more than 3.4 million jobs over 10 years, accounting for 15% of the nation's job growth. More than two-thirds of those gains were wiped out last month as the state lost 2.3 million jobs.

California accounted for 11.4% of all jobs lost nationwide in April as the unemployment rate jumped 10.2 percentage points since March, the largest one month rise since 1976 when the state began using its current formula to measure job losses. All of the state's 11 industry sectors saw declines in April, led by leisure and hospitality with more than 866,000.

Nationwide, the unemployment rate reached 14.7% as all 50 states plus the District of Columbia reported increased job losses, according to the U.S. Bureau of Labor Statistics.

The California joblessness statistics released by the state Employment Development Department only tell part of the story because the report is based on a survey conducted the week of April 12.

Many more California residents have lost their jobs since then, with the department reporting 5.1 million people have filed for unemployment benefits since March.

“Businesses that have tried to hold on to workers are deciding that they can’t do so any longer, others are deciding that they can’t stay open with the uncertain future,” said Michael Bernick, former director of the state employment agency and now a lawyer with the firm Duane Morris. “It is only when we have a confident, aggressive reopening in California that we can expect the job reconstruction to truly begin.”

California has been under a mandatory, statewide stay-at-home order since March 19. But Gov. Gavin Newsom, a Democrat, recently has modified the order to allow many businesses to reopen if they follow certain safety measures.

There are signs that some Californians are returning to work. The state's weekly unemployment claims have dropped from more than 1 million during the week of March 28 to just over 246,000 last week, according to Sung Won Sohn, a professor of finance and economics at Loyola Marymount University.

“There are some positives for the state. The early lockdown imposed in the Bay Area followed by Southern California has reduced infections and saved many jobs,” he said.

But the surge of claims has exhausted the state’s unemployment trust fund, forcing it to borrow billions of dollars from the federal government.

Melanie Hern said she has not received any unemployment money even though she lost her job as a bartender over two months ago. She has been calling employment development everyday but is often put on hold or hung up on.

The agency last asked her to verify her identity five weeks ago but Hern said she hasn’t heard back even after sending what was requested. The 28-year-old from Folsom,said she borrowed money from relatives and that her boyfriend is paying most of her bills.

“I’m going into debt, because I’m having to push back my bills as much as I can in hopes of getting unemployment,” she said.

Hern said she has resisted checking how much she owes: “It’s one of those things where I’ve stopped looking because it makes you kind of sick to your stomach.”

Even when people are approved for unemployment payments, they are often delayed by more than a month. Mia Foster, 37 and from the Sacramento suburb of Elk Grove, said she had to wait five weeks to receive the money and was forced to ration food for her and her children during the wait.

“After a week or two ... it does kind of take a toll on you mentally,” said Foster, who was furloughed in March from her job providing IT services for health clinics.

State lawmakers vented their constituents’ frustration to employment department director Sharon Hilliard during a public hearing on Thursday.

“I get that there is an unprecedented workload, but I believe government can do better and it has to do better at this time,” said Assemblyman David Chiu, a Democrat from San Francisco. “We have never heard the type of suffering that people are experiencing right now.”

Hilliard said the agency is preparing to hire 1,800 more people to handle the claims. But it would take a staff of 28,000 full-time employees working from 8 a.m. to 8 p.m. seven days a week to answer all calls made to the department, she said.

Still, Hilliard said she agreed with Chiu that the delays are “not acceptable.”

“We are working hard to make sure we are addressing all of the concerns as quickly as possible,” she said.

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